Proposal to cap rent hikes statewide moves forward

With almost unanimous support from the housing committee, a proposal to place a limit on rent hikes statewide is advancing in the California Assembly.

State-mandated caps on annual rent increases would be tied to the consumer price index (CPI), a common measure of inflation, plus 5 percent, under AB 1482, which passed the assembly committee on Thursday.

“The rent is too damn high, and we should do something about it,” said Assemblymember Todd Gloria (D-San Diego).

With the CPI averaging about 2.5 percent in California, AB 1482 would restrict rent increases to 7.5 percent, according to the bill’s author, Assemblymember David Chiu (D-San Francisco). He calls his proposal as an “anti-rent gouging” measure—not rent control.

AB 1482 would apply to all types of rental properties, except those already subject to local rent control laws. That would include the cities of Santa Monica, West Hollywood, and Los Angeles, which already have rent control laws on the books. In the city of Los Angeles, property owners of rent-controlled buildings are right now allowed to raise rent 4 percent.

The assembly bill is modeled after a proposal from UC Berkeley’s Terner Center for Housing Innovation, which found a cap of 5 percent plus CPI would “provide meaningful protection” against “the most egregious rent increases.”

Chiu says it would also allow property owners to continue making profits. He points to data prepared by Housing Now that show “the median annual rent increase in California is far below this proposed cap.”

It’s also far below the amount that property owners have raised rents in Los Angeles County, where rents are up about 2.9 percent year over year, according to real estate tracker CoStar.

Opponents of the bill include the California Rental Housing Association. The organization rejects Chiu’s interpretation of the bill as not being a rent control measure, and argues it would stymie new construction.

“Rent control is not the solution as it keeps housing units off the market, discourages new housing, and hinders the preservation and enhancement of aging housing units,” said CalRHA president Sid Lakireddy.

AB 1482 is part of a larger package of bills proposed by Democratic lawmakers aimed at protecting renters.